Sources said

Italy has a 25% threshold in mandatory bidding for large companies

PM Meloni seeks ways to strengthen the Milan Stock Exchange

The government has recently angered the financial industry

Giuseppe Fonte and Elvira Pollina

Rome, March 31 (Reuters) – Italy is considering raising the ownership threshold to trigger forced bids for listed companies as part of a plan to stimulate the country’s underdeveloped capital markets, three sources familiar with the matter told Reuters.

Since taking office in the second half of 2022, Prime Minister Giorgia Meloni has adopted an initiative to help build shareholders as the Milan Stock Exchange fell into trouble after losing a series of famous companies.

Sources said Monday that due to the sensitivity of the matter, they asked not to name it.

It is currently necessary to introduce a mandatory bid by shareholders, who have risen to the 25% threshold among large companies without a higher shareholder.

One of the sources said that while the move is not imminent, it could raise the threshold of 25%.

For small and medium-sized enterprises, the second 30% threshold is valid. When Italy’s capitalization is below 1 billion euros ($1.08 billion), Italy classifies a company as a small and medium-sized enterprise.

The government said it aims to reform Italy’s financial law this year after consultations with various stakeholders and industry agencies.

The threshold for hiking large companies will have a significant impact on companies such as Italia (Tim), where state-backed state-backed financial group Poste Italiane will become the number one investor with a 24.8% stake.

The higher barrier will allow Poste to buy additional Tim shares without making a buyout, strengthening its holdings of Tim ahead of any M&A deal, three sources said.

However, the main purpose of the Meloni government is to find ways to strengthen the role of the 200-year-old Italians.

Meloni, which marked decades of simplifying corporate acquisitions, is now trying to encourage businessmen to list their companies in Milan without having to worry about losing control of others.

On the other hand, asset managers, including large foreign funds, often advocate rules to prevent the concentration of the power of a few.

Last year, several representatives from the Italian financial industry expressed concern about the government’s measures that made investors a larger list of candidates for how the company’s outgoing board proposed its next candidate.

($1 = 0.9247 euros) (edited by Gavin Jones and Jan Harvey)